Farmers and sugar mills in Tamil Nadu find the State Advised Price fixed for sugarcane unviable – too low say farmers, too high say mills. Both are demanding support from the State Government in the form of additional subsidy.
In a representation to the State Government, the Consortium of Indian Farmers Association has demanded that the Tamil Nadu Government pay farmers Rs 500 a tonne over the sugarcane price of Rs 2,650 – including Rs 100 transport charge — fixed for the current season.
For 2013-14, the Union Government had set the Fair and Remunerative Price at Rs 2,100 a tonne. Tamil Nadu added Rs 550 more to the fair price to set the State Advised Price at Rs 2,650. This is Rs 300 higher than last year.
Sugar mill representatives say that at current price levels of about Rs 2,750 a quintal, the industry will suffer a loss of up to Rs 800 for every tonne of sugarcane it crushes. In the current season, the industry is set to crush 150-160 lakh tonnes of cane.
Banks are hesitant to increase exposure to the industry as they find the numbers unviable, according to industry sources.
Mills, too, have represented to the State Government to support sugarcane payments to farmers along the lines announced by the other sugarcane growing States such as Uttar Pradesh, Maharashtra and Karnataka. Sugar mills are willing to pay the fair price initially as it is statutory. In December, the Union Government announced a Rs 6,600-crore soft loan to the sugar mills to support payment to farmers. But industry representatives said that the process is yet to take off as there are “many conditions attached”, said industry sources.
According to CIFA Tamil Nadu General Secretary R.V. Giri, farmers in a detailed representation to the State Government have highlighted the increase in cultivation costs and the support announced by other State Governments for sugarcane farmers.
According to industry sources, 25 private sector mills in Tamil Nadu will handle over 70 per cent of the sugarcane while the balance will be processed by the 18 mills in the co-operative and public sector.
The Government has said in the order on sugarcane pricing that the co-operative and public sector mills will suffer a loss of about Rs 455 crore at current price levels which has to be subsidised by the Government.